The Impact of Enhancements to Weather-Forecasting Services on Agricultural Investment Behavior
A Field Experiment in Taiwan
Bibliographic Data
| ID | 22332000 |
|---|---|
| Authors | Yu-Hsuan Lin (0000-0001-8439-4323, Catholic University of Korea), Hen-I Lin (Chung-Hua Institution for Economic Research), Fang-I Wen (Chung-Hua Institution for Economic Research), Fang‐I Wen (Chung-Hua Institution for Economic Research), Sheng-Jang Sheu (National University of Kaohsiung), Sheng‐Jang Sheu (National University of Kaohsiung) |
| Year | 2021 |
| Volume | 13 |
| Issue | 2 |
| Pages | 211-226 |
| Publication date | 2021-04-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Weather, Climate, and Society (JOURNAL) |
| Journal identifiers | ISSN: 1948-8327 • E-ISSN: 1948-8335 |
| Publisher | American Meteorological Society (PUBLISHER • US) |
| DOI | 10.1175/wcas-d-20-0101.1 |
| OpenAlex | W3113184711 |
| Language | EN |
| References cited | 8 |
A better understanding of farmers’ investment strategies associated with climate and weather is crucial to protecting farming and other climate-exposed sectors from extreme hydrometeorological events. Accordingly, this study employed a field experiment to investigate the investment decisions under risk and uncertainty by 213 farmers from four regions of Taiwan. Each was asked 30 questions that paired “no investment,” “investment with crop insurance,” “investment with subsidized crop insurance,” and “investment” as possible responses. By providing imperfect information and various probabilities of certain states occurring, the experimental scenarios mimicked various types of weather-forecasting services. As well as their socioeconomic characteristics, the background information we collected about the participants included their experiences of natural disasters and what actions they take to protect their crops from weather damage. The sampled farmers became more conservative in their decision-making as the weather forecasts they received became more precise, except when increases in risk were associated with high returns. The provision of insurance subsidies also had a conservatizing effect. However, considerable variation in investment preferences was observed according to the farmers’ crop types. For those seeking to create comprehensive policies aimed at helping the agricultural sector deal with the costs of damage from extreme events, this study has important implications. This approach could be extended to research on the perceptions of decision-makers in other climate-exposed sectors such as the construction industry
Actuarial science · Agricultural economics · Agriculture · Behavioral economics · Business · Climate change · Crop insurance · Economics · Extreme weather · Geography · Investment Decisions · Natural resource economics · Subsidy · Agricultural risk and resilience · Decision-Making and Behavioral Economics · Economic and Environmental Valuation · Finance
Experimental methods
Recent developments in modeling preferences
Risk, Ambiguity, and the Savage Axioms
Informing Decisions with a Climate Synthesis Product
Verification of Seasonal Climate Forecast toward Hydroclimatic Information Needs of Rice Farmers in Northern Ghana
Economic Valuation of a New Meteorological Information Service
Evaluation of the National Weather Service Extreme Cold Warning Experiment in North Dakota
The Effect of Ambiguity Aversion on Insurance and Self‐protection
| Citation velocity | historical |
|---|---|
| Highly cited | No |